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DEPARTMENT OF COMMERCE 

BUREAU OF FOREIGN AND DOMESTIC COMMERCE 

JULIUS KLEIN, Director 


MISCELLANEOUS SERIES—No. 124 


FOREIGN CAPITAL INVESTMENTS 
IN RUSSIAN INDUSTRIES 
AND COMMERCE 

By 

LEONARD J. LEWERY 

Assistant Chief, Eastern European and Levantine Division 



23-2.7 


PRICE, 5 CENTS 

Sold by the Superintendent of Documents, Government Printing Office, 

Washington, D. C. 


WASHINGTON 

GOVERNMENT PRINTING OFFICE 
1923 

















DEPARTMENT OF COMMERCE 

BUREAU OF FOREIGN AND DOMESTIC COMMERCE 

JULIUS KLEIN, Director 


MISCELLANEOUS SERIES—No. 124 


FOREIGN CAPITAL INVESTMENTS 
IN RUSSIAN INDUSTRIES 
AND COMMERCE 

By 

LEONARD J. LEWERY 

it 

Assistant Chief, Eastern European and Levantine Division 



PRICE, 5 CENTS 

Sold by the Superintendent of Documents, Government Printing Office, 

Washington, D. C. 

WASHINGTON 

GOVERNMENT PRINTING OFFICE 
1923 





















LIBRARY OP CONGRESS 

RCOCIVCD 

JAN 9 1224 


DOCUMENTS DIVISION 
















cW3 i lAjZT 



i 


CONTENTS. 


Page. 


Letter of submittal. iv 

Introduction. 1 

Forms of foreign investment in Russian commerce. 1 

Capital stock. 2 

Bonds and debentures. 3 

Distribution of capital by form of investment. 3 

Foreign investments according to form and nationality. 4 

Foreign investments within Russian Soviet boundaries. 6 

Distribution of foreign capital by field of investment. 6 

Investments in pre-war Russia as a whole. 6 

Investments within Soviet boundaries. 7 

French capital. 8 

Metallurgical industries. 9 

Metal working and machinery. 10 

Coal-mining industry. 11 

Petroleum industry. 12 

Other mining industries. 13 

Interlocking directorates. 13 

Estimates of the French commission. 13 

British capital. 15 

Petroleum industry. 15 

Baku fields. 15 

Emba-Ural fields. 18 

Grozny fields. 19 

Maikop fields. 20 

Cheleken Island and minor fields. 21 

Copper, gold, and silver-lead mining and textile industries. 22 

Belgian capital. 23 

Mining and metallurgical industries. 25 

Mineral, glass, and municipal enterprises. 26 

American capital.-.. 27 

Foreign participation in railroad enterprise. 28 



AJ 

Ksi 

f\j 


♦ 



































LETTER OF SUBMITTAL. 


Department of Commerce, 

Bureau of Foreign and Domestic Commerce, 

Washington, September 1 , 1928. 

Sir: Submitted herewith is a resume of the foreign capital invest¬ 
ments in Russian industries and commerce, compiled from Soviet 
official sources by Leonard J. Lewery, assistant chief of the Eastern 
European and Levantine division of the bureau. 

Various commissions and committees have been formed in all the 
principal countries to ascertain the extent and nature of the claims 
of their nationals against Russia. The results of their work, with 
few exceptions, have not been published in extenso up to the 
present time. So far as they have been published, there is sufficient 
agreement with the results of the Russian investigation to give con¬ 
siderable degree of confidence in the latter. The bureau, however, 
is in no position to vouch for the accuracy of the statements herein 
abstracted. 

The details thus assembled have not been published heretofore 
in English and should prove of interest to American investors, past 
or prospective. 

Respectfully, 


Julius Klein, Director . 


To Hon. Herbert Hoover, 

Secretary of Commerce . 


IV 



FOREIGN CAPITAL INVESTMENTS IN RUSSIAN 
INDUSTRIES AND COMMERCE. 


INTRODUCTION. 

The national debts of the former Russian Government are fixed in 
clear-cut amounts, and the situation in this respect is simple enough 
of computation. Far more complex is the problem of ascertaining 
the postwar investments of foreign capital in Russia’s private in¬ 
dustries, transportation, and financial and municipal enterprises. 

Foreign investments in Russia partook of many different forms. 
The interests of nationals of different countries are frequently found 
to be so interlaced as to make the task of fixing and delimiting the 
investments of each country a difficult matter, and this is further 
complicated by the necessity of separating the confiscated holdings 
of Russian nationals residing either at home or abroad from those of 
foreign nationals and of distinguishing between stock capitalization 
of the enterprises and their bonded indebtedness. The exact deter¬ 
mination of the character of ownership and of the mainsprings of 
control was frequently obscured, under pre-war conditions, by the 
fact that some given concern, ostensibly operated by Russian 
nationals, might be controlled by stockholders and directors of 
another nationality, who were in turn financed by parent organiza¬ 
tions or financial institutions of yet another nationality. 

Considerable research work on this subject has been carried out by 
two branches of the Soviet Government, each independently of the 
other: The Commissariat of Finance, through the Institute of 
Economic Research (Works of the Institute, Vol. Ill), and the 
Council of National Economy, in its periodical publication (National 
Economics, October, 1922). The first of these goes into great detail 
in making estimates and in systematizing all the information available 
regarding the extent and distribution of foreign capital investments 
in Russia. 

The following summary of foreign investments represents an 
abstract from the material compiled by the Institute of Economic 
Research, except where otherwise indicated. Investments in Rus¬ 
sian railroad enterprise are not covered by the institute and are 
treated separately. (See p. 28.) 

FORMS OF FOREIGN INVESTMENT IN RUSSIAN COMMERCE. 

According to the summary of its investigation published by the 
Soviet Institute of Economic Research, all foreign capital invested in 
banking, industrial, and commercial enterprises in pre-war Russia, 
in the form of stock companies and corporations compelled by law 
to publish their balance sheets, can be separated into two major 
divisions of (a) capital stock and (6) bonds or debentures. 


✓ 


1 



2 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


CAPITAL STOCK. 

The first division—that of capital stock—can be classified, accord¬ 
ing to form of participation of foreign capital, into nine groups, as 
follows: 

Group 1 .—Enterprises incorporated under foreign laws, whose main 
fields of operations were abroad, but which had branch establish¬ 
ments in Russia. 

Group 2 .—Corporations likewise incorporated abroad, but having 
their entire capital invested in Russia. 

Group 3 .—Enterprises incorporated under Russian laws, whose 
stock, in whole or in the major part, was held abroad through holding 
corporations that were frequently created expressly for the purpose 
and that commonly bear a title identical with, or one strongly re¬ 
sembling, the title of the Russian corporation. 

Group 4-—Corporations operating under Russian laws, whose 
shares were either not listed at all on Russian stock exchanges, or 
while nominally listed were never quoted, but were quoted or dealt 
in on foreign exchanges. 

Group 5 .—Corporations organized under Russian laws, whose 
shares were quoted on both Russian and foreign exchanges. 

Group 6 .—Corporations organized under Russian laws, whose stock 
was not quoted on foreign exchanges and whose dividends were 
payable not only in Russia, but also abroad, through foreign financing 
establishments or foreign branches of Russian banks. The com¬ 
panies under this classification were further characterized by the 
practice of the original stock certificates of such companies being 
substituted, at the general meetings of stockholders, by vouchers or 
scrip of foreign banking establishments, certifying the holding of the 
original certificates by themselves or by their clients. 

Group 7 .—Russian stock corporations whose entire stock was held 
by foreign commercial firms or trading houses, by virtue of which 
they were merely branch institutions of such foreign concerns. 

Group 8 .—Corporations operating under Russian laws, whose stock 
was not quoted on foreign exchanges. Regarding this group of 
corporations, there is no definite information relative to the place 
in which dividends were payable or to the practice of accepting 
scrip of foreign financing institutions at stockholders’ meetings in 
lieu of the original stock certificates. Nevertheless, foreign owner¬ 
ship to a large extent appeared certain from the personnel of the 
founders, directors, and stockholders, or from other indications of 
similar character. 

Group 9 .—Corporations operating under Russian laws, regarding 
which there are not found any of the above-mentioned characteristics 
pointing to foreign participation, but in which such participation, 
nevertheless, undoubtedly existed because it was known that the 
enterprises were financed through participation of foreign banks in 
consortiums and syndicates financing such enterprises. Only a 
limited number of stock corporations, however, were included in 
that group, and only the minimum estimated amount of foreign 
capital was shown as invested in them. 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


3 


BONDS AND DEBENTURES. 

The second division of foreign capital—that of bonds and similar 
obligations—is classified in six groups: 

Group 1. —All securities in foreign currency that were sold abroad 
by corporations operating in Russia under foreign laws. 

Group 2. —Bonds of corporations operating under Russian law 
which were sold abroad, either in foreign currency or in Russian gold 
currency of the old standard (that is, prior to 1897, and when 1 ruble 
equaled one-tenth of an imperial). 1 

Group 2 .— Bonds issued by Russian corporations, either in Russian 
gold rubles of the old standard (one-tenth of an imperial) or in ruble 
notes secured by gold of new coinage (1 ruble equals one-fifteenth of 
an imperial), on which the interest was payable abroad through 
foreign financing institutions or foreign branches of Russian banks. 

Group /+. —Bonds similar in character to those of Group 3, regard¬ 
ing which there are no definite indications of the interest being paid 
abroad, but which, nevertheless, were unquestionably sold abroad 
in whole or to a considerable extent. 

Group 5. —Foreign loans of corporations whose shares are held 
exclusively by foreign concerns, which latter had taken up the 
subscription to such loans. 

Group 6. —Loans of branch establishments of foreign concerns in 
Russia, granted by the parent organizations and shown in their 
balance sheets separately from the operating capital originally 
allotted to the Russian branch. 

DISTRIBUTION OF CAPITAL BY FORM OF INVESTMENT. 

Statistics based on par value of securities. —The statistics of foreign 
investments compiled by the Institute of Economic Research are 
based on the par value of securities. The report states, however, 
that the par value of capital stocks and bonds of Russian enter¬ 
prises held by foreigners does not, as a matter of fact, represent the 
actual investments of foreign capital in these enterprises. There is 
a disparity between the face value and the amounts of capital 
actually paid in. On the one hand, premiums in common stock 
were distributed gratis, along with the preferred stock of many of 
the enterprises, and frequently represented a considerable per¬ 
centage of original stock issues. Again, in many enterprises the 
capital stock issues were inflated at the time of their flotation, in 
consequence of the original founders transferring properties to the 
corporation at a valuation in excess of their real worth. Capitaliza¬ 
tion was further inflated through the sale of bond issues at a discount. 2 

1 The “imperial” was the gold coin of the old Russian Empire—equal to 10 rubles until 1897, but since 

th 2 On^the othe/hand, the Soviet Institute of Economic Research does not take into consideration the 
fact that many foreign concerns operating in Russia had accumulated substantial surplus assets not cov¬ 
ered by their stock capitalization but, nevertheless, representing capital investments. 




4 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


Amount of investment according to form .—With these reservations 
the distribution of foreign capital in Russian enterprises by form of 
investment is given by the institute, as follows: 3 



Capital. 


Per cent 
of grand 

Category. 

Rubles. 

Per cent. 

total 

invest¬ 

ments. 

STOCK OF CORPORATIONS. 

Incorporation under foreign laws: 

44,289,000 

2.2 

2.0 

Group 1. Russian branches of foreign corporations. 

Group 2. Organized solely for Russian business. 

532,278,800 

26.8 

23.7 

Incorporation under Russian laws: 



11.6 

Group 3. Stock held by foreign holding companies. 

259,962,500 

13.0 

Group 4. Stock quoted, only abroad. 

141,587,500 

7.2 

6.3 

Group 5. Stock quoted both at home and abroad. 

3'6,369, 200 

15.9 

14.1 

Group 6. Dividends payable both at home and abroad. 

Group 7. Stock owned by foreign trading concerns. 

Group 8. Directorate and stockholders largely foreign. 

25:. 800,000 

13.0 

11.6 

16,7)0,000 

.8 

.7 

39), 285,000 

19.7 

17.4 

Group 9. Financed by foreign banks. 

27,500,000 

1.4 

1.2 

Total. 

1,986,772,000 

100.0 

88.6 

BONDS. 

Incorporation under foreign laws: 

Group l. Operating in Russia. 

133,718,000 

52.3 

6.0 

Incorporation under Russian laws: 



Group 2. Bonds sold abroad, pavable in foreign currency. 

95,957,300 

37.5 

4.3 

Grouo 3. Bonds on which interest is payable abroad. 

7,000, 000 

2.7 

.3 

Group 4. Other bonds sold abroad. 

5,959, 500 

2.3 

.2 

Group 5. Loans to Russian corporations by foreign holding 



companies. 

6,842,000 

2.6 

.8 

Group 6. Loans of foreign concerns to their Russian branches_ 

6,725,800 

2.6 

.3 

Total. 

256,202,600 

100.0 

11.4 

Grand total. 

2,242,974,600 

100.0 




The investments in the form of capital stock in corporations 
under groups 1 and 2 and the investments in bonds of corporations 
under groups 1, 2, 5, and 6 are considered as foreign investments to 
the full extent. In the case of capital stock investments in groups 
3, 4, 5, 6, 7, &, and 9 and of investments in the bonds of corporations 
in groups 3 and 4, for the majority of enterprises, only that part 
of the capital actually held or controlled abroad is entered in the 
table. It must be borne in mind, therefore, that the actual total 
stock and bond issues of these latter enterprises were considerably 
in excess of the sums shown under the groups enumerated above. 

FOREIGN INVESTMENTS ACCORDING TO FORM AND NATIONALITY. 

The following table classifies the investments under each form 
according to the nationality of the foreign capital and shows the 
extent to which each country participated in the foreign-capital 
enterprises, in pre-war Russia as a whole, both in total amounts 
and in percentage of the grand total. 


3 The “ruble,” wherever used as a measure of value in the tables or text that follow, is the Russian gold 
ruble, having a par value of $0.5146. 











































FOREIGN CAPITAL INVESTMENTS IN RUSSIA 


5 


fin Russian sold rubles: 1 ruble= S0.5146.] 


Category. 


CAPITAL STOCK. 

Incorporation abroad: 

Group 1. 

Group 2. 

Incorporation in Rus¬ 
sia: 

Group 3. 

Group 4.! 67,1S7.500 

Group 5 . 220,369,200 


French. 


4,750,000 
156,478,500 


British. 


5,000.000 
152,913,300 


German. 


Belgian. 


20.726,500 10,500.009 


American. 


20,745,500 


5,750,000 138,200,000 46,900,090 

44,0-90.000 


114,572,700 


1,500,000 
60, 450,000 


Group 6. 
Group 7. 
Group 8. 
Group 9. 


90,340,000 


90, 700,000 
8, 500,000 


Total. 644,075,206 

BONDS. 


10,000.000 79.008,000 
31,200,000 68,585,000 

15,700.000 . 

97,730,000118,800,000 
13, 000,000, 6,000,000 


463,743,300 404,757, 000 


7,612, .500 50,500,000 
30. 400.000 
7,000.000 
33, 800,000 


30,775, 000 


Incorporation abroad: 

Group 1. 

Incorporation in Rus¬ 
sia: 

Group 2. 

Group 3. 

Group 4. 

Group 5. 

Group 6. 


Total. 

Grand total. 

Per cent of grand total. 


48,614,600 


32,057.600 
7,000, 000 


87,672,200 


25,907,600 
6, 447,600 


730, .500 
6,842,000 
3, 808. 890 


3,052, 400 


234,669,209 


1 , 200,000 

’4,"i6o,’oo6 


117,750,000 


Dutch. 


1,770,300 
9,000,000 


10,100,000 

is,’400,666 


36,270, 300 


55,957, 000 


26,154,800 30,984,900 

’ "s’ 2 »," 666 

2,400, i66 . . . . . . . . 


43,736,500 36,836,300 86,941,900 


731,747, 400 .507, 479, 800 441,593,300 321,602,100 


32.6 


22.6i 


19.7, 


14.3 


186,400 


186,400 


117,750,000 


5.2 


36.456. 700 


1.6 


Swiss. 


13,241,700 


18,475,000 

1*456 ,666 


33,166, 700 


312,400 


312,400 


33, 479,100 


1.5 


Category. 

Swedish. 

Danish. 

Austrian. 

Italian. 

Norwe¬ 

gian. 

Finnish. 

Total, all 
countries. 

CAPITAL STOCK. 

Incorporation abroad: 
Group 1 . 

400,000 
8,342,300 


850,000 

562, 500 



44,289,000 
532,278, 800 

259,962, 500 
141,587,500 
316, 369,200 
258, 800,000 
15,700,000 
396, 285,000 
27, 500,000 

Group 2. 

3,520, 800 

243,700 



Incorporation in Rus¬ 
sia: 

Group 3.. 



2,000,000 

Group 4. 






Group 5. 





.!. 

Group 6 . 


300,00.) 

4. 400. 000 

400. 000 



Group 7. 


' ’ I 7 



Group 8 . 

Group 9 . 

15,030,990 10,400,000 

2,300,000 

1,300, 000 

2,300,000 . 

i. 

Total . 

BONDS. 

Incorporation abroad: 
Group 1 




I 

23,772,300 14,220,800 

7, 550,000 

2, S06,200 

2,300,009 2,000,000 

1,986,772,000 







133, 718, 000 

95,957, 300 
7,000,000 
5,959,500 
6, 842, 000 
6. 725, 800 

Incorporation in Rus¬ 
sia: 

Groun 9 . 







Gronn 3 







Groun 4 







Groun 5 







Hmirn f\ 


516,900 





Total 







516,900 



. i . 

256,202,600 

Grand total. 

Per cent of grand total . 

. 




23,772,300 14,737,700 

7, 550, 000 2, 506,200 

2,300,000 2,000,000 

2, 242,974,600 

1.1 

0.7 

O 

_ 

O 

H— 

0.1 

0.1 

100.0 


The allied powers and the United States are represented in the 
preceding totals to the extent of about 75 per cent, German and 
Austrian capital to about 20 per cent, and neutral countries to 
about 5 per cent. 

68766°—23-2 
























































































































































6 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


FOREIGN INVESTMENTS WITHIN RUSSIAN SOVIET BOUNDARIES. 


Not all of the capital investments included in the above table were 
in territory ruled by the Soviet Government. A number of enter¬ 
prises included in the list are now beyond the boundaries of Soviet 
Russia—that is, in Finland, Poland, Esthonia, Lithuania, Latvia, 
or Bessarabia. These enterprises, which escaped expropriation, 
represented a capitalization of 235,668,400 rubles. 

Excluding investments in all such enterprises, the following state¬ 
ment shows the actual distribution of pre-war foreign investments 
in Soviet Russia, practically all of which have been expropriated: 


French... 
British... 
German.. 
Belgian.. 
American 
Dutch.... 

Swiss. 

Swedish.. 


Rubles. 


Rubles. 


648, 089, 700 
500, 564, 400 
317, 475, 700 
311,812,400 
117,750.000 
36, 456, 700 
31, 666, 700 
16, 646, 700 


Danish.... 
Austrian.. 
Norwegian 
Italian.... 
Finnish... 


14, 537, 700 
5, 900, 000 
2, 300, 000 
2,106, 200 
2, 000, 000 


Total. 2,007,306,200 


Of the total foreign investments in Russia within present Soviet 
boundaries, French and English capital represent 57.2 per cent and 
that of all the allied and associated countries 78.7 per cent; capital 
from German and Austrian territory, 16.1 per cent; and from neutral 
nations, 5.2 per cent. The proportionately lower share of German 
investments shown in this table is explained by the fact that a con¬ 
siderable proportion of them were in Poland and the Baltic Succession 
States. 


DISTRIBUTION OF FOREIGN CAPITAL BY FIELD OF 

INVESTMENT 

INVESTMENTS IN PRE-WAR RUSSIA AS A WHOLE. 


According to the institute, foreign investments in Russia were 
distributed among the following classes of commercial enterprises 


in the order of their importance: 

Rubles. 

Mining and metallurgical industries. 834, 321, 000 

Machinery and metal working. 392, 709, 400 

Municipal public-service corporations, urban real estate, etc. 259, 430, 800 

Financial institutions. 237, 200, 000 

Textile industry. 192, 493, 900 

Chemical industry. 83, 593, 200 

Trading establishments. 80, 715, 200 

Foodstuffs manufacture (including tobacco, beverages, etc.). 37, 330, 600 

Paper and printing arts. 31, 404, 800 

Transportation (including rolling stock).. 26, 650, 000 

Sawmills and woodworking industry. 25, 736, 500 

Clay, cement, and glass products. 18, 239, 200 

Animal-products industry. 14, 450 , 000 

Insurance. 8, 700’000 


Total. 2,242,974,600 


It will be seen from the above that 54.7 per cent of foreign capital 
was invested in the mining and machinery industries. The distribu¬ 
tion of these investments is classified below in detail. 


































FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


7 


Mining and metallurgical: Rubles. 

Steel works with blast furnaces. 268, 747, 300 

Petroleum industry. 253, 52C, 100 

Coal mining. 159 , 951 , 600 

Copper mining and smelting. 60, 914, 000 

Gold mining and refining. 41, 792, 500 

Silver-lead and zinc industry. 32,400, 000 

Platinum industry. 9, 305, 600 

Iron-ore mining. 4 , 700, 000 

Quarries. 1,044,200 

Salt industry. 983, 000 

Manganese industry. 962,700 


Total 


834, 321, 000 


Machinery and metal working: 

Machinery works. 

Agricultural machinery. 

Steel mills and metal-working factories. 

Electrotechnical and mechanical works. 

Copper-rolling mills and cartridge factories. 

Factories for metal specialties. 

Locomotive works. 

Car-building works. 

Foundries. 

Wire-drawing mills and nail factories. 

Narrow-gauge-railroad equipment works, including rolling stock_ 

Enamelware factories.. 


81, 845, 500 
81,128, 200 
45,152,400 
42, 353, 000 
39, 850, 000 
34, 983, 000 
22, 204, 200 
14, 950, 300 
14, 550, 000 
10, 792, 800 
2, 900, 000 
2, 000, 000 


Total. 392,709,400 

Of the foreign investments in municipal public-service enterprises 
and the like, the bulk was placed in electric-light and traction com¬ 
panies, as follows: 


Rubles. 

Electric-light companies. 99, 627, 500 

Traction companies. 50, 553, 500 

Light and traction companies. 20, 490, 000 


Total. 170,671,000 


INVESTMENTS WITHIN SOVIET RUSSIAN BOUNDARIES. 


The foregoing tables are supplemented by another, showing the 
distribution of foreign investments within Russian Soviet boundaries 
after deducting the capitalization of enterprises located outside the 
present Soviet Russia. 

[In Russian gold rubles; 1 ruble=80.5146. J 


Field of investment. 

Financial institutions. 

Insurance. 

Transportation (including 

rolling stock). 

Municipal public-service 

corporations. 

Mining and metallurgy.... 

Metals and machinery. 

Textile. 

Paper and printing. 

Sawmills and woodworking 
Clay, cement, and glass 

products. 

Animal products. 

Manufactured foodstuffs, 
beverages, and tobacco.. 

Chemical products. 

Trading and commission 
houses. 

Total. 


French. 


113,300,000 

1 , 000,000 

1,500,000 


British. 


German. 


25,700,000 72,700,000 
900,000 3,000,000 

600,000 5,950,000 


19,955,200 21,390,800 55,244,600 
285,611,800 307,699,100 
134,927,700 28,022,300 


Belgian. 


2,500,000 


American. 


1,000,000 


10,500,000 
107,597,50o' 


39, 759,300 
1,000,000 
5,327,500 


64,502, 200 
4,263,100 
9,470,000 


5,064,000 . 

400,000 9,500,000 


48,238,000116,434,200 
74,483,100 45,562,900 
8,400,000; 5,058,000 

4,250,000 .| 

279, 400; 638,000 


500,000 
11,485,100 
60,950,000 100,000 


Dutch. 


9,500,000 
500,000 


5,150,000 
31,594,000 

3,500, 000 


900,000 10,894,200' 
2,100,000, 1,950,000 


18,891,900 9,400,000 738, 700 

1,375,000 29,703,100 9,939,100 

8,250,000 ! 2,827,5(K)'. 


2,071,600 
800,000 


1,200,000 6,000,000 

54,600,000 5,500,000 


648,089, 500 500, 564,400 317, 475, 700 311, 812,600 117, 750,000 36,456,700 


Swiss. 


16,000,000 

5.237.500 
166, 700 

9.862.500 
400,000 


31,666,700 



























































































8 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


Field of investment. 

Swedish. 

Danish. 

Austrian. 

Italian. 

Nor¬ 

wegian. 

Finnish. 

Total, all 
countries. 

Financial institutions 



1,500,000 




225,200,000 
8,700,000 

26,650,000 

229,171,800 
775,511,900 
354,825,700 
127,582,000 
12,013,100 
18,986,500 

17.658.200 
13,950,000 

36, 230,600 

80.111.200 

80,715,200 

Insurance 




2,300,000 


Transportation (including 
rnllinf stocks 


8,190,000 

3,000,000 




Municipal public-service cor- 

nnratinns 

5,483,700 





Minim* find metallnrcv _ 


806,200 
1,300,000 



Metals and manhinorv 

6,963,000 


2,350,000 



Textile 




Paper and printing 


2,100,000 





Sawmills and woodworking.. 
Clay, cement, and glass 
products 

1, 200,000 










Animal products . 







Manufactured foodstuffs, 

beverages, and tobacco.... 



2,050,000 




Chemical products . 


300,000 

1,037,700 




Trading and commission 
houses... 

3,000,000 




2,000,000 

Total. 



16,646,700j 14, 537,700 

5,900,000 2,106,200 

2,300,000 

2,000, OOOy 007,306, 200 



Commercial investments in Russia by principal world powers are 
further analyzed separately in detail. Care has been taken in each 
instance to lav stress on the trend of investment of foreign capital 
that was characteristic of the nationals of the various countries. 
Thus, British investments in the Russian petroleum industry have 
been taken up in considerable detail, partly because of the widespread 
interest in Russian oil but chiefly because British capital found its 
favorite investment in that particular line of Russia’s industries. 
The same applies to the metal-working and machinery enterprises, with 
regard to French capital; Belgian capital gravitated especially toward 
the metallurgical and coal-mining industry, public-service utilities, etc. 

No particularized analysis is entered into with regard to German 
invested capital outside of its classification in the tables preceding 
because Germany had renounced its claims for pre-war investments 
in Russia under the terms of the Rapallo treaty of April 16, 1922. 
Hence any general discussion of the nature of German investments 
would not be of immediate practical interest. 


FRENCH CAPITAL. 


The general participation of French capital in Russian industries 
and commerce, by form and field of investment, is shown in the 
following table. The figures cover investments in pre-war Russia as 
a whole, including the territory now separated as the Baltic States, 
Russian Poland, and Bessarabia. 


Field of investment of French capital. 


Mining and metallurgical industry. 

Metals and machinery. 

Financial institutions. 

Textile. 

Chemical products. 

Public utilities, real estate, warehousing, 

building construction. 

Manufactured foodstuffs, beverages, and 

tobacco. 

Timber and woodworking. 

Clay, glass, and cement products. 

Trading. 

Transportation. 

Insurance. 

Paper and printing. 

Animal products. 

Total. 


Enter- 


Capital. 


Per cent 

prises. 

Stocks. 

Bonds. 

Total. 

of total. 

55 

259,632,700 

57,465,400 

317,099,300 

43.3 

36 

144,528,400 

13, 899,300 

158,427,700 

21.6 

11 

113,300,000 

113,300,000 

15.5 

18 

47,084,800 

9,995,300 

57,080,000 

7.9 

15 

31,594,000 

31,594,000 

4.3 

15 

25,712,400 

5,092,500 

30,804,900 

4.2 

10 

5,650,000 


5,650.000 

.8 

3 

5,327,500 


5,327,500 

.7 

4 

3,845,300 
3,500,000 

1,218,700 

5,064,000 

.7 

3 

3,500,000 

.5 

1 

1,500,000 


1,500,000 

o 

2 

1,000,000 

1,000,000 


1,000,000 

.1 

1 


1,000,000 

.1 

1 

400,000 


400,000 

.Of 

175 

644,075,100 

87,672,200 

731,747,400 

100.0 







































































































FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


9 


METALLURGICAL INDUSTRIES. 

Metallurgical enterprises—chiefly blast furnaces and steel works— 
occupied first place among French investments in this field, with 16 
works and an investment of 139,184,300 rubles out of a total invest¬ 
ment of 317,099,300 in 55 mining and metallurgical enterprises, or 
19 per cent of total French investments. These metallurgical works 
were distributed by regions, as follows: 


Region of Russia. 

Enter¬ 

prises. 

French 
invest 
ments, 
in rubles. 

Southern. 

10 

3 

2 

1 

111,896,800 
14,862,500 
10,425,000 
2,000,000 



Moscow. 

Total. 

16 

139,184,300 



Southern Russia .—Of the 10 French-controlled metallurgical plants 
situated in the south, 2 represented French corporations whose com¬ 
bined investment covered 74,499,000 francs (27,937,000 rubles) — 
(1) Societe Anonyme V Union Russe Miniere et Metallurgique, with 
a total investment of 56,699,000 francs (21,262,000 rubles), of which 
27,000,000 were in the form of capital stock and 26,699,000 in the 
form of bonds; (2) Societe Anonyme des Minerals de Fer de Krivoi 
Rog, with a total investpient of 23,128,000 francs (8,673,000 rubles), 
of which 13,500,000 were capital stock and 9,628,000 were bonds. 
Belgian capital participated in the first-mentioned concern to the 
extent of about 3,000,000 rubles. 

Another corporation among these 10 was a Belgian company, the 
Societe Anonyme Providence Russe a Marioupol, with a stock capital 
of 38,993,000 francs (14,600,000 rubles), of which about 10,668,000 
francs (4,000,000 rubles) was held by French interests. 

The remaining seven concerns of the south were all Russian com¬ 
panies, classified by the institute under two groups: Group 1 covers 
Russian concerns whose shares were practically all held abroad; 
Group 2, those whose shares were subjects of trade on both the 
Russian and Paris exchanges. 


[In Russian gold rubles; 1 ruble=$0.5146, or 2.666 francs.] 


Russian metallurgical companies controlled by French. 

Total stock 
capital. 

Estimated 
French 
capital stock. 

Estimated 
Belgian 
capital stock. 

Group 1. 

The Donetz Iron and Steel Works. 

The Taganrog Steel Works. 

Russo-Belgian Steel Works. 

South Russian Dnieper Works. 

Total. 

7,687,500 
21,000,000 
20,000,000 
15,000,000 

16,187,500 
6,000,000 
5,000,000 
4,000,000 

1,500,000 
2 12,600,000 
* 10,000,000 
6,000,000 

63,687,500 

21,187,500 

30,100,000 

Group 2. 

Briansk Foundry, Rail and Machine Works. 

The Donetz-Yuriev Steel Works. 

41,175,000 

22,100,000 

15,400,000 

« 24, 705,000 
M3,260,000 
4,000,000 

1,500,000 

Nikopol Marioupol Mining and Steel Works. 

Total. 

3,000,000 

78,675,000 

41,965,000 

4,500,000 

Grand total. 

142,362,500 

63,152,500 

34,600,000 



1 To which must be added French-owned bonds to the amount of 4,960,300 rubles. 
a To this must be added 1,563,000 rubles of outstanding debentures held in Belgium. 

* To this must be added 9,149,200 rubles of outstanding debentures held in Belgium. 

* To this must be added French-owned bonds aggregating 6,000,000 rubles. 

* To this must be added French-owned bonds amounting to 3,849,000 rubles. 





















































10 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


Ural region .—In the Ural region there was one active French 
concern, the Societe Anonyme des Forges et Acieries de la Kama, 
with a stock capital of 18,000,000 francs and debentures to the 
amount of 4,300,000 francs, all held in France. Besides,large invest¬ 
ments of French capital were made in the Russian concern, the 
Komarov Iron Mining and South Ural Metallurgical Works, capi¬ 
talized at 3,750,000 rubles. Although the shares of this Russian 
corporation were not quoted on the Paris Bourse, practically all of 
its capital was French (3,500,000 rubles). French capital further 
participated, through the St. Petersburg Commercial Bank, to the 
extent of 20 per cent of the stock capital of 15,000,000 rubles of the 
Simsk Metallurgical Works and the First Ural Agricultural Machinery 
Works. 

The extent of influence of French capital in the Russian metallurgi¬ 
cal industry is illustrated by the figures of production showing that, 
in 1913, 2,403,000 long tons of pig iron were produced by those 
southern works that were financed by French capital, or 78.8 per 
cent of the entire production of pig iron in the south and 52.6 per 
cent of the total for all Russia. If to the output of these southern 
works is added the output of those two works in the Urals, the two 
in Poland, and the one in the Moscow district that were wholly or in 
part financed by French capital, their total output of pig iron in 1913 
will add to 2,774,000 long tons, or 60.7 per cent of the total for 
pre-war Russia. 

The influence of French capital in Russian metallurgical industry 
was not, however, confined to production, since the marketing of 
the output of the entire metallurgical industry in Russia was con¬ 
centrated in the hands of the trust “Prodameta” (metal sales), 
in which French capitalists were the controlling factor as principal 
stockholders. Thus the entire policies of the Russian metallurgical 
industry were directed by the French interests. 

METAL WORKING AND MACHINERY. 

Locomotive works .—The most important lines among metal¬ 
working enterprises controlled by French capital were the loco¬ 
motive and shipbuilding works. All the five locomotive-building 
works in which French capital was interested were incorporated in 
Russia. The shares of two of them—The Russian Machine Works 
“Hartman,” capitalized at 9,000,000 rubles, and the Russian Loco¬ 
motive and Machine Building Co., with a capital of 7,840,000 rubles— 
were quoted on the Paris Exchange. The amount of French capital 
invested in these two concerns is estimated at approximately 3,000,000 
and 4,704,000 rubles, respectively. The stocks of the three other 
works, Putilof, Kolomna, and Sormovo, were not quoted in Paris; 
but French capitalists participated in the financing of these enter¬ 
prises by taking up the supplementary stock subscriptions floated 
by these companies and by having their representatives on the 
respective boards. 

in 1913 the five locomotive-building works designated above 
turned out 527 new engines out of a total of 609 for the whole of 
Russia, or 86.5 per cent. 

Shipbuilding concerns .—As for shipbuilding concerns, the Banque de 
FUnion Parisienne was the chief interest behind the Russo-Baltic 
Ship and Machine Building Co. and the North Western Metallurgical 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


11 


Machine and Shipbuilding Works. The Societe Generale pour Favor- 
iser le Developpement du Commerce et de l’lndustrie en France was 
the backer of the Franco-Russian Works Co. and of the St. Petersburg 
Metal Works Co. The last-mentioned concern was combined with 
the Russian Shipbuilding Co., which was financed, together with 
the Nikopol Works and Shipyards Co., by the St. Petersburg Inter¬ 
national Commercial Bank. This bank, conjointly with the Banque 
de TUnion Parisienne, consolidated the interests of all the ship¬ 
building works. At the same time the St. Petersburg International 
Commercial Bank financed most of the locomotive works above 
designated, thus dovetailing the financial interests of the railroad 
rolling stock and the shipbuilding concerns. 

COAL-MINING INDUSTRY. 

Next to the metallurgical industry, the largest sphere of influence 
of French capital was found in the coal-mining industry, where 
there were 21 concerns controlled by French capital, whose total 
investment of 102,968,100 rubles represented 14.2 per cent of all 
French capital invested in Russia. Of these 21 enterprises 5 were 
located in the Dombrova region of Poland, with French interests 
amounting to 18,812,500 rubles. 

Of the 14 coal-mining enterprises operating in the Donetz Basin, 
in which French capital participated, 4 were French corporations 
with the following capital investments: 


[In gold francs; 1 franc-=$0,193, or 0.375 ruble.] 


French corporations operating in Donetz Basin. 

Stocks. 

Bonds. 

Total capital. 

Society des Sels Gemmes et Ilouilles de la Russie Meridi^nale. 

Societe Franco-Russe des Houilleres de Berestow Krinka. 

Societe des Charbonnages de Nikifowka. 

Compagnie des Charbonnages d’Ekaiherine. 

Total in francs._. 

24,000,000 
12,500,000 
6,000.000 
6,500,000 

10.500.500 

10.145.500 

34.500.500 

22.645.500 
6,000,000 
6,500,000 

49,000,000 
18,379,600 

20,645,000 
7,744,200 

69,646,000 
26,123, S00 

Total in rubles. .. 



French capital further participated in the Belgian company, 
Societe Anonyme Charbonnages Prokhorov Donetz, capitalized at 
8,000,000 francs. Of this amount, about 2,500,000 francs (approxi¬ 
mately 938,000 rubles) were held in France. 

The following three Russian concerns were virtually owned out¬ 
right by French interests. Their shares were quoted only on the 
Paris exchange. 

[In Russian gold rubles; 1 ruble=$0.5140, or 2.666 francs.] 


Russian coal-mining concerns owncjl by French 
interests. 

Total capital. 

French participation. 

Stock. 

Bonds. 

Stock. 

Bonds. 

The §outh Russian Coal Mining Co. 

The Ekatherine Mining Co. 

Russian-Donetz Coal Mining Co. 

Total .. 

5,000,000 
5,625,000 
12,600,000 

3,850,000 
5,412,000 
3,486,000 

5,000,000 
5,000,000 
12,000,000 

3,850,000 
5,412,000 
3,486,000 

23, 225,000 

12,748,000 

22,000,000 

12,748,000 











































12 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


The shares of four other Russian companies were quoted neither 
on the Paris nor on the Russian exchanges, but were virtually owned 
by foreign interests: (1) Golubov-Berestovo-Bogodoukhov Mining 
Co., with a stock capital of 11,440,000 rubles; (2) Russian Company 
of Internal Waterways, Highways, and Branch Railways (formerly 
Markov Collieries), with a capital stock of 2,400,000 rubles; (3) 
Seleznev Coal Mining and Works Co., capital stock of 4,000,000 
rubles; (4) Coal Mining and Metallurgical Society of the Ouspensk 
Basin, capital stock 4,500,000 rubles. 

The stock capital of the first two concerns named above was 
entirely French owned, that of the third about 80 per cent French 
owned. In the last concern Belgian interests predominated (see 
p. 26); only 250,000 rubles of stock were in French hands. The total 
participation of French capital in these four enterprises amounted to 
17,290,000 rubles. 

The mining enterprises operating in the Donetz Basin, owned com¬ 
pletely or in part by French capital, produced coal in 1915 to the 
amount of 6,580,800 long tons, or 31 per cent of the entire production 
in the Donetz Basin. If to these figures is added the output of seven 
French-controlled metallurgical concerns in the same basin which 
mined their own coal, the total production of coal in the Donetz Basin 
by enterprises controlled in whole or in part by French capital 
amounted to 10,801,300 tons, or 50.9 per cent of the total output of 
the Basin. 

In addition to concerns operating in the Donetz Basin, French 
capital participated in the Belgian corporation, Societe Anonym e 
Charbonnages de Pobedenko, capitalized at 2,350,000 francs, or 
881,250 rubles, of which the French share was estimated at approxi¬ 
mately 800,000 francs, or about 300,000 rubles. 

The influence of French capital in the coal-mining industry, as in 
the metallurgical, was not confined to production; marketing of the 
entire coal output of the Donetz Basin was consolidated in the hands 
of the sales organization “Produgol” (coal sales), in which the con¬ 
trolling interest belonged to representatives of French capital, as 
principal stockholders. 


PETROLEUM INDUSTRY. 

The petroleum industry ranked third in the extent of participa¬ 
tion of French capital in the mining industry, namely, 51,115,000 
rubles. French capital was interested principally in enterprises of 
the Baku oil fields, incorporated under Russian laws. The stocks 
of three of these enterprises were quoted on both the Paris and the 
Petrograd exchange: (1) The Baku Petroleum Co., with a total 
stock capital of 7,785,500 rubles, in which French interests carried 
3,000,000 rubles; (2) The G. M. Lianosov Sons Petroleum Associa¬ 
tion, haying a total stock capital of 30,000,000 rubles, in which 
French interests controlled 15,000,000 rubles; (3) The Russian 
Naphtha Corporation, whose entire capital stock covered 33,000,000 
rubles, of which the French share was 20,000,000 rubles. 

Moreover, the Paris Rothschilds retained about 20 per cent of 
the stock capital of the Caspian & Black Sea Petroleum & Trad¬ 
ing Corporation, the other 80 per cent of the total capital stock 
of 10,000,000 rubles having been sold to the Anglo-Dutch combine. 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


13 


French capital participated further to a large extent in the Baku 
enterprises through the medium of the Societe Generate Naphthifere 
Russe, which is the French designation of the Russian General Oil 
Corporation (Ltd.)—an English corporation in which French capi¬ 
talists had invested about 16,000,000 francs, or 6,000,000 rubles. 
(See p. 16.) 

French capital was interested also in the Grozny oil fields, where 
their interests were confined to three enterprises: (1) Nouvelle 
Societe Anonyme Standard Russe Compagnie de Naphte, capitalized 
at 2,973,600 francs and operating under French statutes; (2) British 
Spies Petroleum Co. (Ltd.), in which the French participated; (3) 
The Grozny Petroleum Corporation, 1. A. Achverdov & Co. (Russian), 
in which French capital participated through the medium of the 
Belgian company, Societe Anonyme Petroles de Grozny, whose 
stock was quoted on the Paris exchange and which was the owner 
of the entire stock capital (8,812,500 rubles) of this Russian company. 

OTHER MINING INDUSTRIES. 


The participation of French capital in other branches of mining 
industry is represented as follows: 


Industry. 

Enter¬ 

prises. 

French 

interests. 

Industry. 

Enter¬ 

prises. 

French 

interests. 



Rubles. 



Rubles. 

Cooper production. 

1 

6,000,000 

Lead and zinc production. 

2 

3 750 000 

Platinum production. 

1 

5 ; 000 ; 000 

Iron ore production. 

2 

2 625’ 000 

Gold production. 

2 

4,500,000 

Manganese ore production.... 

1 

' 150, 7 000 


INTERLOCKING DIRECTORATES. 

French capital invested in the mining and metal industries, 
besides being consolidated within the separate lines of production, 
such as steel, coal, etc., through the cartel-like sales organizations 
(Prodameta, Produgol, etc.), was further combined through inter¬ 
locking directorates, consolidating the interests of the most hetero¬ 
geneous industries. A diagram is presented by the author of the 
Soviet report, showing the participation of 11 individuals as directors 
simultaneously in coal-mining, metallurgical, copper, zinc, and 
platinum smelting enterprises, each of the persons designated sitting 
or presiding on the board of at least two of the great concerns, and 
one being chairman of three concerns and director of two others. 

ESTIMATES OF THE FRENCH COMMISSION. 

The foregoing data from the Soviet institute may be compared 
with the summary regarding French capital invested in Russian 
industries and banks, as elaborated by the general commission for 
the protection of French interests in Russia, under the chairman¬ 
ship of M. Noulens, in connection with the Genoa conference in the 
summer of 1922. 

The estimates given by it are based on the prices quoted on June 
30, 1914, for the various securities issued by the companies. Con¬ 
sequently, it sets forth the total market value instead of par value, 
expressed in gold francs, of shares, stocks, and bonds issued by 
French, Russian, Belgian, and British companies, etc., which were 
reported as belonging to French holders. 























14 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


Field of invesment of French capital. 

Gold francs. 

Gold rubles. 

Ore mining and metallurgical industry . 

845,000,000 
335,000,000 
55,000,000 
210 ,000,000 
120 ,000,000 
160,000,000 
225,000,000 
550,000,000 

316,875,000 
125,625,000 
20,625,000 
78,750,000 
45,000,000 
60,000,000 
84,375,000 
206,250,000 

Coal and salt mining_7.*.. 

Gold and platinum mines. 

Oil companies. 

Chemical industries. 

Textile industries. 

Various enterprises. 

Banks.... 

Total. 

2,500,000,000 

937,500,000 



Of the above capitalization, 385,000,000 francs were reported by 
the commission as within the territory of former Russian Poland. 
The Russian Institute gives a total of only 222,500,000 francs as 
invested by French nationals in Russian enterprises outside of the 
present Soviet territory. The value of securities issued by com¬ 
panies incorporated in France enters into the above total to the 
amount of 745,000,000 francs. 

The total value of French capital invested in Russian coal mines, 
operated as such or in connection with metallurgical companies, is 
estimated by the French commission at 330,000,000 francs, while 
the value of capital invested in metallurgical enterprises proper 
would be 555,000,000 francs. Of the capital classified under coal 
and salt mines, 170,000,000 francs were invested in Polish enterprise, 
leaving 165,000,000 francs invested at present in Soviet Russia; under 
those designated as “ ore mining and metallurgical ” enterprises, 
125,000,000 francs were invested in Poland, leaving 720,000,000 in 
Soviet Russia. 

Municipal public-service enterprises .—A very considerable dis¬ 
parity is found between the French and the Soviet data concerning 
participation of French capital in Russian municipal enterprises. 
This is due to the fact that the Soviet figures relate only to private 
companies. The French position is that loans issued by Russian 
municipalities did not enjoy the State guaranties. As such are not 
included in the Russian national debt, they must be regarded, there¬ 
fore, as private investments. The Russian Soviet authorities show 
but the small amount of 30,805,000 rubles invested by the French in 
private municipal enterprise, of which amount almost 75 per cent is 
shown invested in municipal electric light, power, and traction enter¬ 
prise, and municipal gas, water, and telephone works—presumably 
the rest of the investments are taken care of under the head of 
u Financial institutions.” 

According to the French commission, although the nominal amount 
of Russian municipal loans quoted in Paris was 307,670,000 francs, 
the result of the census taken by the office of private property in¬ 
terests, after deducting the amount of loans issued by Polish mu¬ 
nicipalities, showed 456,233,500 francs invested in Russian mu¬ 
nicipalities. The greater part of this difference is explained by the 
relatively important amount of locally floated municipal loans which 
had been acquired by French citizens formerly living in Russia. 

To sum up: French capital played an especially important part in 
the Russian metallurgical, coal-mining, and machine-building indus¬ 
tries, and, further, in Russian banking and finance; as for all the 
other industries, there was little active participation of French enter- 
price, and French interests were confined mainly to scattered indi¬ 
vidual investments in Russian stocks and securities. 

























FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


15 


BRITISH CAPITAL. 


The general participation of British capital in Russian industries 
and commerce, as shown by the Institute of Economic Research, 
appears in the following table, classified by field of investment: 


Field of investment of British capital. 


Mining and metallurgical. 

Textile. 

Metal working and machinery. 

Financial institutions. 

Public service corporations, real estate, 

warehouse, and construction.. 

Manufactured foodstuffs, beverages, and 

tobacco. 

Sawmills and woodworking.. 

Animal products.. 

Mercantile. 

Paper and printing arts.. 

Chemical.. 

Insurance. 

Transportation.. 

Total... 



Capital invested (in rubles). 


Enter- 




Per 

cent 

of 

total. 

prises. 

Stocks. 

Bonds. 

Total. 

64 

280,170,300 

27,528,900 

307,699,100 

60.7 

20 

59,810,000 

9,907,500 

69,717,500 

13.7 

11 

27,927,800 

94,500 

28,022,300 

5.5 

8 

25,700,000 


25,700,000 

5.1 

6 

16,547,400 

4,843,400 

21,390,800 

4.2 

10 

18,292,800 

599,100 

18,891,900 

3.7 

8 

10,670,000 


10,670,000 

2.1 

3 

10 ,000,000 


10 ,000,000 

2.0 

4 

8,250,000 


8,250,000 

1.6 

3 

3,500,000 

763,100 

4,263,100 

.7 

3 

1,375,000 

1,375,000 

.3 

3 

900,000 


900,000 

.2 

1 

600,000 


600,000 

.1 

144 

463,743,300 

43,736,500 

507,479,700 

100.0 


PETROLEUM INDUSTRY. 


The lion’s share of British capital invested in mining and metal¬ 
lurgical enterprises in Russia prior to the revolution was held by the 
petroleum industry—namely, 171,400,000 rubles, or one-third of all 
British investments in Russia. 


British interests were distributed as follows among the principal 
oil fields: 


Baku. 

Emba-Ural 
Grozny. . . 

Maikop_ 

Cheleken.. 
Sakhalin. . 


Rubles. 


Rubles. 


49, 485, 000 
31, 287, 600 
25, 549, 500 
24, 118, 500 
23, 633, 700 
10, 500, 000 


Ferghana. 4, 716, 200 

Chatma. 1, 895, 200 

Naftalan. 238,600 


Total. 171,424,300 


BAKU FIELDS. 


Four purely British concerns were operating directly in the Baku 
district, of which three confined their operations to Baku exclusively. 
The combined capitalization of the three companies reached the sum 
of £2,096,460 (19,811,700 rubles), distributed as follows: 




Stocks. 

Bonds. 

Total investment. 

British companies in Baku fields. 

Pounds 

sterling. 

Rubles. 

Pounds 

sterling. 

Rubles. 

Pounds 

starling. 

Rubles. 

T?ns«ian Pptrnlp.nm Co (1 t.d.1_ 

994,600 

711,360 

9,399,100 

6,722,400 

276,100 

94,400 

2,609,300 

1,270,700 

805,760 

20,000 

12,008,400 

Baku Russian Petroleum Co., 
(Ltd.). 

1909 

891,900 

7,614,300 

189,000 

Russian United Petroleum 
(Ltd ) 

Co. 

20,000 

189,000 









Total.. 


1,725,960 

16,310,500 

370,500 

3,501,200 

2,096,460 

19,811,700 



















































































16 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


The fourth of the British companies above mentioned—the 
European Oil Fields Corporation (Ltd.)—was also engaged in petro¬ 
leum enterprise in Rumania and Galicia, and its investment in the 
Baku oil fields amounted to only 5,000,000 rubles. 

Furthermore, there were interested in the Baku district two more 
purely British companies—the New Schibaeff Petroleum Co. (Ltd.), 
with a capital of £1,600,000, and the Bibi-Eibat Oil Co., with a capital 
of £312,600; the latter however, did not operate directly, but 
through the medium of Russian corporations. The first company 
owned outright the Russian Mineral, Oil, and Chemical Products 
Corporation, S. M. Schibaeff & Co., with a stock capital of 6,500,000 
rubles and bonds to the amount of 2,360,000 rubles. The second 
British concern owned a Russian corporation under a similar name, 
with a capital of 2,500,000 rubles. 

Besides these two Russian corporations, which were owned out¬ 
right by British interests, the latter participated also to a very 
large extent in two other Russian companies operating in Baku: 
(1) The Caspian-Black Sea Oil & Trading Co., with a capital of 
10,000,000 rubles; (2) The Binagadi Oil & Trading Co., with a 
capital of 4,000,000 rubles. The British participation in the first 
of these two concerns was conjointly with Dutch and French interests. 
Originally the entire stock of the Caspian-Black Sea Oil & Trading 
Co. was held by the Paris Rothschilds, but in 1912 the major part 
(over 80 per cent) was acquired by the Anglo-Dutch combine of the 
Royal Dutch concern and the Shell Transport & Trading Co. (Ltd.). 
The last-mentioned company held 3,200 shares of the Caspian- 
Black Sea Oil & Trading Co., to the par value of 3,200,000 rubles; 
but in view of the participation of British capital in the Royal Dutch 
group, the interests of British capital, including the indirect partici¬ 
pation through the Dutch concern, can be estimated at 4,000,000 
rubles. The controlling interest of British capital in the Binagadi 
Oil & Trading Co. was not less than 3,500,000 rubles. 

- The participation of British capital in the Baku petroleum industry 
was not confined to its holdings in the eight companies above desig¬ 
nated. The incorporation in London, on June 28, 1912, of the 
Russian General Oil Corporation (Ltd.), by a group of Russian banks 
interested in financing the petroleum industry, and several repre¬ 
sentatives of Russian oil corporations, with the aid of British and 
French capital, was designed to consolidate the dominating in¬ 
terests of the Baku oil fields. This holding company was capitalized at 
first at £1,250,000; but on January 16, 1913, the capital was increased 
by £750,000, and in September of the same year b}^ £500,000 more, 
the last issue being floated at a rate of 200 per cent and subscribed 
to by five Russian banks and the Anglo-French bank of O. A. Rosen¬ 
berg & Co. Assuming that one-half of the capital of this corporation 
was subscribed by Russian banks and oil industrialists, while the 
other half was furnished by French and English capitalists, and that 
the participation of French capital amounted to 16,000,000 francs 
(6,000,000 rubles), the holdings of British capitalists are estimated 
at 5,821,500 rubles. According to the Institute of Economic Re¬ 
search, in all probability the actual holdings of British interests 
considerably exceeded this estimate. 

Simultaneously with its last stock-floating operation, the Russian 
General Oil Corporation (Ltd.) acquired on the Berlin Bourse a great 


FOREIGN CAPITAL INVESTMENTS TN RUSSIA. 1 7 

block of shares of the new issue of the Nobel Bros. Petroleum Cor¬ 
poration, which were entered on that exchange on April 24 of the 
same year in the amount of about 6,000,000 rubles par value. With¬ 
out giving to the General Oil Corporation control over the Nobel 
interests, a strong bond was established between the two groups, 
creating a community of interests. This was further cemented by 
the election on June 26, 1915, of A. I. Putilof, chairman of the board 
of directors of the Russian General Oil Corporation, as a board 
member of the Nobel concern, and of E. L. Nobel, chairman of the 
board of the Nobel concern as a board member of the G. M. Lianosof 
Sons Oil Corporation, capitalized at 30,000,000 rubles—one of the 
biggest concerns consolidated under the Russian General Oil Cor¬ 
poration. 

At the beginning of 1916 the General Oil Corporation controlled 17 
Russian corporations (operating under Russian statutes) through 
majority stock holdings, with an aggregate capitalization of 121,- 
400,000 rubles and a total production of oil in that year of 87,700,000 
poods. 4 Their production, with a few minor exceptions, had been 
steadily declining since 1910, when it totaled 157,000,000 poods. 
Next in importance came the Shell group, combining eight Russian 
companies, with a total capitalization in 1914 of 47,700,000 rubles 
and a production of 92,300,000 poods of oil; and the Nobel group of 
five companies, capitalized at 40,670,000 rubles and producing, 
in 1914, 48,600,000 poods of oil. These three major combines con¬ 
trolled three-fourths of the Russian oil trade and 50 per cent of the 
total Russian production. 

Outside of these three major groups, consolidating the leading 
petroleum enterprises of Russia, there exists in London a financial 
organization interested in Baku oil—namely, the Oil Fields Finance 
Corporation, comprising the Russian Petroleum Co. (Ltd.); the 
Baku Petroleum Co., 1909 (Ltd.); the Russian LTiited Petroleum 
Co. (Ltd.); the European Oil Fields Corporation (Ltd.); the Bibi- 
Aybat [or Eibat] Oil Co.; the Amalgamated Russian Petroleum Co.; 
and the Romany Syndicate. This combination was capitalized alto¬ 
gether at 27,310,000 rubles and accounted for 17,000,000 poods of 
petroleum output in 1914. It had no organization of its own for 
the sale of petroleum products in Russia and placed its output in the 
hands of the Anglo-Dutch combine, which controlled a suitable organ¬ 
ization in Russia in the form of the Petroleum and Trading Co. 
“Mazut” (capital 12,000,000 rubles). The latter concern had no oil 
fields or refineries of its own, but operated a huge fleet of tankers, 
tank cars, and a network of storage tanks and reservoirs; its sole 
business was the storage and transport of and the trading in petroleum 
products. 

Thus the entire Baku petroleum industry was concentrated, through 
the cementing medium of English capital, in the hands of two car¬ 
dinal groups—“General Oil” and “Anglo-Dutch”—each of these in 
its turn representing a combine of two powerful groups. The two 
cardinal groups were interlinked, partly by a common sales organiza¬ 
tion and partly by joint participation in the Russian General Oil 
Corporation (Ltd.) or in the Shell Transport & Trading Co. 


<8$ poods = 1U. S. barrel of 42 gallons; 62 poods = 1 long ton. 





18 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


The total production of petroleum in 1914 in the four principal oil 
fields of Baku amounted to 338,000,000 poods, of which quantity 
60 per cent was extracted by companies entering the four inter¬ 
national combines. In these combines British capital participated 
to the extent of but 22.3 per cent, in the form of actual investments, 
but played a dominant part through the control of the junctions and 
commanding positions where the interests of the various units merged 
with one another. The extent of British control in the Baku oil 
fields appears in the following table: 


International 
combine operat¬ 
ing in Baku 
oil fields. 

Fully owned by 
British capital. 

With partial British participa¬ 
tion. 

Total concerns under British 
control. 

Total cap¬ 
italization 
in 1914. 

Oil pro¬ 
duced 
in 1914. 

Total cap¬ 
italization 
in 1914. 

British 

holdings. 

Oil pro¬ 
duced 
in 1914. 

Total cap¬ 
italization 
in 1914. 

Bri f ish 

holdings. 

Oil pro¬ 
duced 
in 1914. 

Anglo-Dutch_ 

Nobel group. 

Rubles. 

/ 6,500,000 
V 2,360,000 

Poods. 

}s,200,000 

Rubles. 

10 ,000,000 

J30,000, 000 
V10,670,000 

1112,780,000 
V 6, 780,000 

Rubles. 

4,000,000 

) . 

Poods. 

20 , 800,000 

48,600, 000 

87, 700, 000 

19,800,000 

Rubles. 

18,860,000 

40,670,000 

119,560,000 

Rubles. 
12 , 860,000 

Poods. 

26,000,000 

48, 600,000 

.107,500,000 

17,000,000 

Russian General 
Oil Corpora¬ 
tion . 



/ 

\ . 




/ 

5, 810, 000 

5, 810,000 

27,310,000 

British holdings 
in Russian 

General Oil 
and its Nobel 
absorptions. 

Oil Fields Fi¬ 
nance Corpo¬ 
ration. 

123,810,000 
j 1 3,500,000 

)l7,000,000 


27,310,000 




Total. 

36,170,000 

22 , 200, 000 

170,230,000 

9,810,000 

176,900,000 

206,400,000 

45,980,000 

199,100,000 


1 Bends. 


EMBA-URAL FIELDS. 

Next to Baku in extent of British participation were the Emba- 
Ural fields. At the beginning of 1915 two British companies were 
directly active in this district, vdiile two companies operated through 
Russian concerns; and, lastly, British capital was heavily invested in 
two other Russian concerns. The first two companies mentioned 
above were the West Ural Petroleum Co. (Ltd.), with a capital of 
£300,000, and the Ural-Emba Oil Fields (Ltd.), vdth a capital of 
£102,000. The enterprises of these two concerns w T ere at that time 
still in the stage of organization. The British companies operating 
through Russian concerns, whose entire security issues they held, w r ere: 
(1) The Emba-Caspian Oil Co. (Ltd.), with a capital of £1,140,000, 
which operated through a Russian company under a similar designa¬ 
tion with a capital of 14,000,000 rubles; (2) the Ural-Caspian Oil 
Corporation (Ltd.), with a capital of £816,666, operating through a 
Russian concern of similar designation that had a capital of 7,000,000 
rubles. 

British capital was further invested in the Emba Petroleum & 
Trading Co. and in the Ural-Caucasus Corporation. The stock capital 
of the first-named concern w^as 6,000,000 rubles, in which Nobel Bros, 
participated to the extent of 42.5 per cent and the Russian Naphtha 
Co. (controlled by the General Oil Corporation) to the extent of 15 










































FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


19 


per cent; the rest, comprising 2,550,000 rubles, represented British 
capital. The stock capital of the Ural-Caucasus Corporation amounted 
to 8,000,000 rubles and, in addition, this company floated a loan in 
England covered by debentures to the amount of £988,700. This 
last-mentioned concern had no oil fields of its own, but held securities 
of other oil concerns and carried on a trade in casings, oil pipe, 
machinery, and all kinds of equipment for the petroleum industry, 
including also construction of reservoirs and other plants, chiefly 
through the Emba-Ural region. 

The output of oil in the Emba-Ural region was distributed among 
the above-named concerns, as follows: 


[In poods; 8$ poods=l U. S. barrel of 42 gallons.] 


British Emba-Ural oil concerns. 

1914 output. 

1916 output. 

Ural-Caspian Oil Corporation. 

9,745,000 
6,526,000 
383,000 

8.180.700 

6.228.700 
1,137,900 

Emba Petroleum & Trading Co. 

Emba-Caspian Oil Co. 

Total. 

16,654,000 

15,547,300 



The production of oil in the Emba-Ural region was thus to a very 
large extent controlled by British capital. Of the three concerns 
mentioned above, the first entered the Anglo-Dutch combine, since 
all the stock of the British holding company was owned by the 
Asiatic Petroleum Co. (Ltd.), which represented a division of the 
Shell Transport & Trading Co. (Ltd.). The Emba Petroleum & 
Trading Co. was part of the Nobel group, while the last-mentioned 
Emba-Caspian Oil Co. was closely bound up with the Russian General 
Oil Corporation through interlocking directorates. 

GROZNY FIELDS. 

Four British companies operated in the Grozny-Terek district, of 
which one was represented by a Russian concern. The three purely 
British companies, their capital, and oil output are listed below. 


British companies operating in Grozny fields. 

Stock 

capital. 

Production of oil. 

1914 

1916 

Spies Petroleum Co. (Ltd.). 

£788,360 
750,000 
160,000 

Poods. 1 

19,100,000 
15,500,000 

Poods. 

9,100,000 

27,800,000 

North Caucasian Oil Fields Co. (Ltd.). 

A ngln-Teralc Petroleum Co. fLtd.1._. 

Total. 



1,698,360 

34,600,000 

36,900,000 



1 8 | poods=l U. S. barrel of 42 gallons. 


The fourth British concern, the Gleboff-Grozny Petroleum Co. 
(Ltd.), operated through a Russian concern—the Cheleken Daghestan 
Petroleum Co., with a capital of 1,000,000 rubles—which produced 
2,500,000 poods in 1914 and 4,800,000 poods in 1916, 

































20 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


In addition there were three Russian concerns in which British 
and Dutch capital were jointly interested, as follows: 


British-Dutch compauies operating in Grozny fields. 

Stock 

capital. 

Estimated 

British 

interests. 

Production of oil. 

1914 

1916 

Russian Grozny Standard Oil Corporation. 

Rubles. 

12,000,000 
4,000,000 
1,200,000 

Rubles. 

5,000,000 
1,500,000 
1,009,000 

Poods. 
11,600,000 

Poods. 

8,300,000 

2 ,200,000 

Grozny Snnja Petroleum Go . 

Moscow Petroleum Go 


Total. 



17,200,000 

7,500,000 

11,600,000 

10,500,000 

# 


The three companies mentioned above, as well as the North Cau¬ 
casian Oil Fields (Ltd.), were included within the Anglo-Dutch com¬ 
bination through their participation in the Shell Transport & Trading 
Co. (Ltd.), while the Spies Petroleum Co. (Ltd.) is likewise bound 
up with the combine through the medium of interlocking directorates. 

The total production of oil by all the Grozny concerns in which 
British capital was interested amounted to 48,700,000 poods in 1914, 
and to 52,200,000 poods in 1916, or 50 per cent of the entire output 
of Grozny oil. 

MAIKOP OIL FIELDS. 

According to data published in the Stock Exchange Official Intel¬ 
ligence for 1915 there were in operation at the end of 1914, in the 
New Maikop fields of the ^Forthern Caucasus on the Black Sea coast, 
25 British companies, capitalized at £4,153,000 in all. A majority 
of these concerns did not succeed in striking any oil and gradually 
lapsed, so that their investments were lost. At the outbreak of the 
revolution only 11 of these companies were in operation. They are 
listed in the following table: 


British concerns operating in New Maikop fields in 1917. 

Stock 

capital. 

Production of oil. 

1913 

1914 

London Maikop Oil Corporation (Ltd.). 

£391,200 

157. 500 
236, 200 
i 84, 700 
300,000 
256, 500 

91,000 

290.200 

220.500 

240.200 
251,000 

Poods. 

18,300 
651,500 
17, 200 
396, 200 
1,748,300 
414,300 
931,900 
27, 800 
531, 700 

Poods. 

Maikop Victory Oil Co. (Ltd.). 

216,200 

Maikop New Producers (Ltd.). 

Maikop Premier Oil Syndicate (Ltd.). 

707, S00 
901,200 
130,400 
564,600 
73,800 
905,900 

Black "Sea Oil Fields (Ltd.). 

Maikop Combine (Ltd.). 

British Maikop Oil Co. (Ltd.). 

International Russian Oil Fields (Ltd.). 

Maikop Spies Co. (Ltd.). 

Australian Maikop Oil Co. (Ltd.). 

Levanskoe Petroleum Co. (Ltd.). 



Total. : . 



2,519,000 4,737,200 3,499,900 



1 In addition to this stock capital, the company issued debenture bonds to the amount of £33,200. 


The London Maikop Oil Corporation, together with the Australian 
Maikop Oil Co., entered the combine known as the Oil Trust More- 
ing Barclay. The rest of the companies, with the exception of the 
International Russian Oil Fields and the Maikop Spies Co., entered 
the so-called Bishopsgate concern. The International Russian Oil 
Fields belonged to the McHarvey & Hough ton-Mitch ell concern, 
while the Maikop Spies Co. was a branch of the Spies Petroleum Cor¬ 
poration. 























































FOREIGN CAPITAL. INVESTMENTS IN RUSSIA. 2l 

The Bishopsgate concern was linked with the Russian General Oil 
Corporation through the participation of Alfred Hicks on the board 
of each group. 

In 1913 nine of the British companies in Maikop accounted for 
99.7 per cent of the entire petroleum production of the Maikop fields, 
while seven of them produced 88.6 per cent of the 1914 output. 

CHELEKEN ISLAND AND MINOR FIELDS. 

Five British companies were in operation in the Cheleken fields, 
which were combined into one organization. This combination was 
linked with the Bishopsgate concern of the Maikop oil companies 
through the participation of Sir J. S. Harmood Banner on the board 
of each group. The five British companies were: 


Capital. 

Central Cheleken Oil Fields (Ltd.). £303, 500 

Tcharken Cheleken Oil Co. (Ltd.). 822,100 

Cheleken Oil Fields (Ltd.). 293,800 

Gadjinsky Cheleken Oil Co. (Ltd.). 916, 500 

Chagrit Cheleken Oil Co. (Ltd.). 165, 000 


Total. 2,500,900 


The total production of oil on Cheleken Island in 1914 amounted to 
5,000,000 poods, the above-mentioned British companies accounting 
for about three-fourths of the total and the rest belonging to the Nobel 
concern. The Cheleken organization was connected with the Anglo- 
Dutch combine through interlocking directorates. 

In Sakhalin there was one British company, the Sakhalin Oil 
Fields (Ltd.), which was a member of the Boxell Meisel concern 
through the Russian company, “ Russian Far Eastern Corporation,” 
with a capital of 10,500,000 rubles. The Sakhalin Oil Fields Co. at 
the outbreak of the war was in the organizing stage, no oil having 
been produced up to that time, although drilling operations were in 
progress. 

In Ferghana, Turkestan, was the Ferghana Oil Fields (Ltd.), with 
a capital of £499,054, which was* a member of the MacDonald con¬ 
cern. Its annual productivity ranged between 1,500,000 and 2,000,- 
000 poods. 

In the Chatma district (Tiflis Government) was the Russian Oil 
Lands (Ltd.), with a capital of £200,000, while in the Naftalan dis¬ 
trict (Elizabethpol Government, Caucasus) there operated the South 
Caucasian Syndicate (Ltd.), incorporated in 1912. This company 
was a member of the Russian General Oil Corporation. 

Five British companies opened operations between 1910 and 1912 
in the Taman-Kertch district (Crimea), with an aggregate capitali¬ 
zation of £919,693, but up to 1915 no results had been achieved by 
them. Their capital, therefore, hardly represented any tangible assets 
at the outbreak of the revolution, and for this reason is not included 
in the calculations of British properties nationalized by the Soviets. 
The same statement applies to the Kazan Oil Fields (Ltd.), in the 
Kazan Government, organized in September, 1913, with a capital of 
£250,000; of this amount only £80,000 had been paid up at the 

beginning of 1915. . 

In addition to petroleum-producing corporations, British capital 
was invested in the following concerns directly connected with the 
petroleum industry: The Storage and Trading Corporation “Mazut,” 









22 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


capitalized at 12,000,000 rubles, of which about 5,000,000 repre¬ 
sented British capital; the Tank Storage & Carriage Co. (Ltd.), 
a British concern with a capital of 50,000 rubles; the Maikop Pipe 
Line & Transport Co. (Ltd.), a British concern with a capital of 
£3,947,400 and debentures to the amount of 1,633,700 rubles—all 
held by the British; and three refineries, the V. Popps, the Vacuum 
Oil Co., and the Maikop Refineries Corporation (Ltd.), with a total 
stock capitalization of 20,072,400 rubles, of which about 50 per cent 
was British. 

Thus, the sum total of British capital invested in the petroleum 
and allied industries is estimated at 183,295,400 rubles. The ma¬ 
jority of the companies were consolidated into several large com¬ 
bines, which in their turn were interlinked with one another and 
with the Nobel group by community of interests. 

COPPER, GOLD, AND SILVER-LEAD MINING AND TEXTILE INDUSTRIES. 

Copper .—Next in importance, according to the proportion of 
British capital investments, was the copper industry of Russia. 
Only five British companies were engaged in that industry prior to 
the war, but their combined output amounted to more than half of 
the entire copper production in Russia. Three of these companies 
operated in the Urals, one in the Caucasus, and one in Siberia. The 
three in the Urals—all Russian companies owned outright by British 
concerns that were incorporated under a similar designation—had a 
combined capitalization of 40,810,400 rubles, distributed as follows: 
(1) The Kishtym Corporation (Ltd.), with a total capitalization of 
28,810,400 rubles, comprising stock to the amount of 16,000,000 and 
bonds for 12,810,400 rubles; (2) the Sissert Co. (Ltd.), with total 
stock capital of 6,000,000 rubles; (3) the Tanalyk Corporation, with 
total stock capital of 6,000,000 rubles. 

Gold .—Seven British companies were engaged in the gold-mining 
industry, of which six, with a total capitalization of £2,035,000, 
were purely British concerns. The largest gold-mining company in 
Russia—the Lena Gold Mining Corporation, whose output exceeded 
700 poods of pure gold annually—was a Russian corporation capital¬ 
ized at 16,500,000 rubles, of which amount no less than 10,500,000 
rubles were held by a British concern, the Lena Gold Fields (Ltd.), 
at the beginning of 1917. The output by the British-controlled en¬ 
terprises in Russia amounted to about 25 per cent of the total pro¬ 
duction of gold in Russia. 

Silver-lead .—Three companies controlled by British capital were 
engaged in the silver-lead industry, namely: (1) The Bidder Mining 
Corporation, capitalized at 16,000^000 rubles; (2) the Kirghiz Mining 
Corporation, capitalized at 8,500,000 rubles; (3) the Russian Mining 
Corporation, with a capital of 350,000 rubles. 

The first two of these companies were founded and financed by the 
Russo-Asiatic Corporation (Ltd.), and were closely connected with 
the Kishtym and the Tanalyk Corporations. At the beginning of 
the Russian revolution their silver-lead mining enterprises had barely 
passed the construction and organizing stage. Their activities were 
designed on such a big scale, however, that, in the words of P. V. 
Aull, of the Soviet Institute of Economic Research, "from the moment 
ol the commencement of operations by these two enterprises the 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 23 

silver-lead industry of Russia would find itself in the hands of British 
capital, since the productivity of all the other enterprises would be 
completely lost alongside the volume of production of these two 
concerns.” 

British capital further participated to some extent in the ore- 
mining and metallurgical industries in the Urals and in the south, 
but in no great proportion. 

Textile industry .—In the textile industry British capital virtually 
monopolized the production of thread. Of the four Russian thread 
mills, capitalized at 34,600,000 rubles, not less than 27,820,000 rubles . 
represented British capital that was controlled mostly by the inter¬ 
nationally known firm of J. & P. Coates. The same firm was con¬ 
cerned also in the cotton-spinning industry, through a controlling 
share in the Nevski Cotton Spinning Mills. 

British capital was therefore chiefly interested in the Russian 
petroleum, copper, and silver-lead industries, and in the manufac¬ 
ture of thread. 


BELGIAN CAPITAL. 

The recapitulation of Belgian investments, as given by the Russian 
Institute of Economic Research, appears below: 


Field of investment of Belgian capital. 

Enter- 


Capital. 


Per 
cent of 
total. 

prises. 

Stocks. 

Bonds. 

Total. 

Mining and metallurgical, including petro¬ 
leum . 

28 

Rubles. 

97,025,800 

Rubles. 

19,908,400 

Rubles. 

116,934,200 

36.4 

Municipal enterprises. 

29 

62,571,100 

46,493,800 

109,064,900 

33.9 

Metals and machinery. 

20 

30,714,700 
10,839,200 

16,516,600 

47,231,300 

14.7 

Mineral products 1 . 

11 

636,000 

11,475,200 

3.5 

Chemical. 

5 

8,687, 600 

2,518,600 

11,206,200 

3.5 

Rolling stock (sleeping cars). 

1 

10,500,000 
8,805,600 


10,500,000 

9,863,600 

3.4 

Textile.*. 

6 

558,000 

2.9 

Financial. 

2 

2,500,000 


2,500,000 

1,950,000 

.8 

Animal products. 

2 

1,950,000 

738,700 


.6 

Manufactured foods, beverages, and tobacco. 

2 


73S,700 

.2 

Cork manufacture. 

1 

327,500 

310,500 

636,000 

.2 

Total. 

107 

234,660,200 

86,941,900 

321,602,100 

100.0 


i Corresponds in part to Belgian classification of structural and refractory materials and glass. 


The committee for the protection of Belgian interests in Russia 
was formed at Paris shortly after the Bolshevist revolution of Novem¬ 
ber, 1917. In so far as found possible, this committee has established 
the value of Belgian investments in Russia. According to its secre¬ 
tary, Eugene Witmeur, the value of Belgian-Russian enterprises was 
determined and verified in various ways: (a) From their annual 
statements; (6) from their stock-exchange value of June-July, 1914; 
(c) from their nominal capital or from their last recorded dividend 
or interest payment capitalized at 5 per cent; (d) in the case of 
private enterprises publishing no statements, from their total re¬ 
corded expenditures for equipment and purchase of concessions. 
The ruble values have been converted to gold francs at the fixed 
rate of 2.666 francs to the ruble, or 0.375 ruble to the franc. 

The lists given hereafter, as compiled by the committee, include 
Russo-Belgian enterprises, incorporated under Belgian or Russian 































24 


FOREIGN CAPITAL' INVESTMENTS IN RUSSIA. 


law, in which the Belgian interest is predominant. It is assumed by 
the committee that any error made possible through not taking 
account of the holdings of other nationals in these enterprises is 
compensated by omitting from consideration the Belgian invest¬ 
ments in non-Belgian enterprises in Russia. 

On the other hand, the data compiled by the Russians take into 
account only those Belgian or Russian corporations whose state¬ 
ments were made public, either by statute requirement or in accord¬ 
ance with their own by-laws. 

Belgian investments in Russian industrial enterprises are classified 
by the Belgian committee as follows: 


Field of investment of Belgian capital. prices* 

Francs. 

Rubles. 

Mining and metallurgical. * 1 2 3 4 5 6 37 

Petroleum. 3 

Municipal enterprises. 43 

Metals and machinery. 16 

Structural and refractory materials. 11 

Chemical. 4 

Textile. 7 

Miscellaneous. 36 

1,160,000,000 

113,000,000 

582,000,000 

142,000,000 

38,000,000 

107,000,000 

73,000,000 

68 ,000,000 

67,000,000 

435,000,000 
42,375,000 
218,250,000 
53,250,000 
14,250,000 
40,125,000 
27,375,000 
25,500,000 
25,125,000 

Total. 161 

2,350,000,000 

881,250,000 


The totals as given by the Russian and by the Belgian sources are 
fairlv close in their accord; but there are considerable disparities in 
details, of which the following are most important: 

1. Out of the 161 concerns indicated in the Belgian recapitulation 
only 67 are designated by name, with more or less specific details of 
capitalization. Of the latter, all save two are accounted for in the 
Russian document. 

2. The Russian list comprises also 42 enterprises about which full 
details are given—some of considerable magnitude—not specifically 
designated in the Belgian list. 

3. The Belgian list of 67 specifically designated concerns includes 
16 that are located in Poland, Latvia, Lithuania, Bessarabia, and 
Finland, and therefore not properly subjects of claim against Russia. 

4. In addition to the total 67 concerns specifically named in the 
Belgian list, there are also presented the claims of those Belgians 
participating in four foreign concerns —the Russian General Oil" Cor- 
poration and three French corporations. 

5. The Russian list comprises 13 enterprises whose property was 
in territory not controlled, by the Bolshevist Government, giving 
their total capitalization at 9,989,700 rubles. * 

6. There are at least two instances of duplication in the Belgian 
list, where both the parent Belgian concern and the Russian com¬ 
pany incorporated by it present identical claims covering the same 
enterprise. 

7. There is frequent disparity in the amounts of capitalization of 
enterprises referred to in the two compilations. While in the Russian 
documents the amounts of capital stock and debentures are always 
given separately and with precision, frequent reference is found in 
the Belgian list to “founders 7 shares without nominal value,” and 
“ shares without definite value.” 























FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


25 


MINING AND METALLURGICAL INDUSTRIES. 

Metallurgical .—According to the Russian data, the leading place 
among the Belgian enterprises classified under “ mining and metal¬ 
lurgical” was occupied by 12 metallurgical concerns capitalized at 
74,190,000 rubles, or 21 .i per cent of the total Belgian industrial 
investments in Russia. 

Of these 12 concerns 10 were located in the south, 1 in the black- 
soil belt, and 1 in Poland. Four of the former were Belgian corpora¬ 
tions, with invested capital as follows: 


[In francs; 1 franc= $0,193 or 0.375 ruble.] 


Belgian metallurgical concerns operating in South Russia. 

Stocks. 

Bonds. 

Total 

capital. 

S. A. Providence Russe & Marioupol. 

S. A. Sous la Denomination de Toleries de Constantino vka. 

S. A. Hauts Foumeaux et Usines de l’Oh- ovaia k Ouspensk. 

S. A. Miniere et Metallurgique de Tambov. 

38,993,000 
10 ,000,000 
5,000,000 
16,418,000 

5.910.400 

1.218.400 

44.903.400 

11.218.400 
5,000,000 

16,418,000 

Total, in francs. 


70,411,000 

26,410,700 

7,128,800 
2,674,000 

77,539,S00 
29,084,700 

Total, in rubles. 



According to the Belgian summary, all shares of the first-mentioned 
concern (95,986 preferred and 30,000 founders’ shares) were without 
nominal value; the capitalization of the second is stated to be 
10,000,000 francs in preferred stock and 2,500,000 in founders’ shares; 
of the third, 5,000,000 francs and 5,000 founders’ shares; of the fourth, 
16,500,000 francs and 64,000 common-stock shares without nominal 
value. 

Belgian capital further participated, conjointly with the French, 
in seven Russian metallurgical concerns, already dealt with under the 
heading “French capital” (p. 9). 

Coal mining. —Coal-mining enterprises financed by Belgian capital 
were next in importance. Of these, eight were located in Russia and 
were capitalized at 24,000,000 rubles; one, capitalized at 500,000 
rubles, was in Poland. Five of the former were Belgian corporations, 
with the following capital investments: 


[In francs: 1 franc=$0.193 or 0.375 ruble.] 


Belgian coal-mining concerns operating in Russia. 

Stocks. 

Bonds. 

Total 

capital. 

S. A. Houillfere dTrmino (Donetz). 

S. A. Charbonnages, Mines et Usines de Gossoudarieff Bairak. 

S. A. Mini6re et Jndustrielle Bielaya. 

c a nvirhonnocrDi! PrnHmrnv Donftt.z __ __ 

5,000,000 
4,800,000 
7,240,000 
8,000,000 
2,350,000 

2,572,600 

6,010,900 

7,572,600 
4,800,000 
13, 250,900 
8,000,000 
2,642,000 

S. A. Charbonnages de Pobedenko. 

'T'ntal in franns . 

292,000 

27,390,000 
10,273,800 

8,875,500 
3,329,200 

36,265, .500 
13,603,000 

'T'nf-Q 1 in mhlfts .. 



French capital to the extent of approximately 3,300,000 francs 
(1,238,000 rubles) participated in the last two above-named concerns, 
as stated under the heading “French capital ” (pp. ll, 12), leaving total 
Belgian interests amounting to 9,000,000 rubles of stock and 3,365,000 
rubles of outstanding debentures, or a total of 12,365,000 rubles. 












































26 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


Belgian capital further figured prominently in the Coal Mining 
and Metallurgical Corporation of the Ouspensk Basin (in the Donetz 
region), capitalized at 4,500,000 rubles, with Belgians holding no less 
than 4,000,000 rubles in addition to the outstanding debentures 
amounting to 1,642,900 rubles. 

Likewise, Belgian capital held a controlling interest in the United 
Collieries of Petro-Marievka and Varvaropol. According to the 
Belgian summary, the capital of this concern is given as 4,500,000 
rubles, in 45,000 shares of 100 rubles par, with the statement that the 
company was acquired in 1912 for 21,000 shares in the new corpo¬ 
ration. The shares of the United Collieries were not quoted at 
Brussels, but 8 out of 11 members of the board, including the chair¬ 
man, were Belgians; Belgian participation was estimated at no less 
than 3,200,000 rubles, besides outstanding debentures of 1,551,800 
rubles held entirely by the Belgians. 

MINERAL, GLASS, AND MUNICIPAL ENTERPRISES. 

Petroleum .—One concern, the Societe Anonyme Petroles de 
Grozny, was engaged in petroleum production in the Grozny district, 
operating through the Russian company I. A. Akhverdov—a com¬ 
pany capitalized at 8,812,500 rubles, of which about 2,000,000 were 
held by French interests. 

Gold mining .—Of the three gold-mining enterprises listed, only one 
was a Belgian corporation—the Society Anonyme des Mines d’Or 
du Catchkar—with a capital of 9,500,000 francs. It is estimated, 
however, that considerably more than one-half the capital stock of 
this company was held by French interests. The other two con¬ 
cerns were Russian corporations, with Belgian interests amounting to 
2,000,000 rubles out of 11,250,000 rubles capitalization, and to 
1,500,000 rubles out of 3,000,000 rubles capitalization, respectively. 

Plate glass .—Under “mineral products industry” special mention 
must be made of the plate-glass industry, which was entirely monopo¬ 
lized by Belgian interests. The three companies enumerated in both 
the Belgian and Russian lists are: Verreries du Donetz en San- 
tourinovka, S. A.; Compagnie des Glaces du Midi de la Russie, S. A.; 
and Societe Belgo-Russe pour la Fabrication des Glaces. 

The Belgian list gives the capitalization of the first-named concern 
at 17,800,000 francs, in addition to 2,000 founders’ shares without 
nominal value; of the second, 12,000,000 francs; no data are given 
about the third concern; the total investment is given at 68,000,000 
francs. 

The Russian list states the capitalization of the first concern as 
8,800,000 francs in stock and 701,000 francs in debentures; of the 
second, 6,000,000 francs; of the third (a Russian corporation), 
1,218,750 rubles in stock and 372,750 rubles in bonds; the total for the 
three concerns, 19,743,900 francs. 

Municipal traction and electric power .—An important and distinct 
field of Belgian capital investments in Russia was the municipal 
public-service enterprises. Belgian capital built and in some cases 
operated electric traction, light, and power systems in Petrograd, 
Odessa,, Kazan, Saratof, Rostof, Simferopol, Vladicaucase, Bialystok, 
and Radom (the last two in present Poland); traction systems in 
Moscow, Kief, Kursk, Orel, Astrakhan, Ekaterinoslav, Kharkof, 


FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 


27 


Tashkent, Tiflis, Ekaterinodar, Sebastopol, Yaroslav, Krementchug, 
Riga, Warsaw, Reval, and Kishinef (the last four in succession 
States); municipal electric light and power plants at Imatra (in 
Finland, for the Petrograd power supply), Kovno, Czenstochowa and 
Kilozavar (all outside of Soviet territory); also the telephone system 
of Odessa. 

According to the Belgian summary, not fully itemized, the total 
Belgian capital invested in the above enterprises amounted to 
582,000,000 gold francs, while the specific calculation of the Institute 
of Economic Research, eliminating a number of enterprises situated 
outside of the territory of Soviet Russia, gives the total capitalization 
at 290,767,300 francs. 

It was stated in a report presented by Eugene Witmeur for the 
Belgian delegation to the Genoa conference that bank deposits for the 
credit of accounts current of Belgian subjects and corporations prior 
to the revolution were estimated at 193,000,000 francs; cash in 
private safes, at 87,000,000 francs; commercial debts outstanding, at 
125,000,000 francs; or a total of 405,000,000 francs. Personal property 
left in Russia by departing families was valued at 105,000,000 francs. 

AMERICAN CAPITAL. 

American investments in Russia presented a strong contrast with 
those of European nations. Investments by American nationals in 
industrial securities, railroad stocks, or those of small enterprises, 
especially on a partial scale, are practically absent; small individual 
holdings of Russian industrial securities are likewise negligible. 
Half a dozen large American concerns hold practically all of American 
claims against Soviet Russia. All of the American capital was, 
with but two exceptions, invested in enterprises of trade, finance, or 
insurance. 

Manufacturing concerns .—The Russian summary itemizes 10 
American enterprises, with total investment of 117,750,000 rubles. 
Of these, two were manufacturing concerns—the International 
Harvester Co., with a stock capital of 60,450,000 rubles ($31,000,000), 
and the Otis Elevator Co., capitalized in Russia at 500,000 rubles. 

Trading companies .—Of the concerns engaged in commerce and 
insurance the Singer Manufacturing Co., with a stock capital of 
50,000,000 rubles, and the Russian Babcock & Wilcox Corporation, 
capitalized at 500,000 rubles, represented branches of these well- 
known American concerns. American capital controlled almost 
completely three other Russian trading corporations: The Russian- 
American Trade and Industrial Corporation, with a stock capital of 
3,000,000 rubles; the J. Black Co., stock capital of 1,000,000 rubles; 
and the Russian-American Rato Corporation, of 1,000,000 rubles 
stock capital. The participation of American capital in the first- 
mentioned concern was estimated at not less than 2,500,000 rubles; 
in the second and third, 800,000 rubles each. 

American capital was further largely interested in the Russian 
Vacuum Oil Co., capitalized at 2,400,000 rubles. The direct Ameri¬ 
can holdings in this concern, represented by the National City Bank 
of New York, were estimated at 50 per cent, or 1,200,000 rubles. 

Insurance companies. —The New York Life Insurance Society and 
the Equitable Life Assurance Society of the United States were 




28 FOREIGN CAPITAL INVESTMENTS IN RUSSIA. 

represented in Russia by corporations operating under Russian 
statutes, which were required by law to deposit certain minimum 
funds (500,000 rubles each) with the Russian State Bank by way of 
guaranty to policyholders. 

FOREIGN PARTICIPATION IN RAILROAD ENTERPRISE. 

To complete the extent of Russian indebtedness to foreign enter¬ 
prise invested in stock and share companies that were subject to 
public accountancy, there must be added stocks of railroads, not¬ 
withstanding the fact that their balance sheets are not published; 
the bonds of private Russian railroad companies, being guaranteed 
by the Government, will come under the head of national debt, as 
would, of course, the bonds issued for State railroads. 

The amount of foreign capital invested in the stock of Russian 
railroad companies is estimated by the Soviet Institute of Economic 
Research at 27,500,000 rubles. Deducting the stock of the Gerby- 
Kelce Railroad Co., which went over to Poland (capitalized at 
2,352,000 rubles, in which German capital was interested to the extent 
of about 1,000,000 rubles), the amount of foreign investment in 
railroad enterprise that was actually expropriated is about 25,150,000 
rubles. Of the total 27,500,000 rubles of foreign capital invested in 
railroad stock, French capital was represented by 21,500,000 rubles; 
German, by 3,000,000; British, by 2,000,000; and Dutch, by 1,000,000. 

The segregation of these railroad stocks of the Russian companies 
from the other railroad obligations of Russia does not appear quite 
clear. The statement of the author, P. V. Aull, of the Institute of 
Economic Research, is at variance in this respect with that of the 
Bolshevist economist, Arsky, in his detailed analysis published in 
the Moscow Communist organ “Pravda” (December 1 , 1921), in 
which stocks of the railroad companies referred to by the former 
author are included under the head of guaranteed securities. Neither 
is such a distinction drawn by the anti-Soviet writers. 

According to G. A. Pavlovsky, F. S. S., of Great Britain (in Rus¬ 
sian Economist, London, September-October, 1920), Government 
guaranties were given on the debenture stock of 22 railroad com¬ 
panies, to the total amount of 1,741,490,000 rubles, and on the share 
capital of four companies, amounting to 30,063,000 rubles. In 1916 
a guaranty was given to the amount of 350,000,000 rubles, thus 
raising the total of guaranteed railroad loans to 2,121,553,000 rubles. 
Of this total amount of railroad loans, a little over 40 per cent, or 
870,000,000 rubles gold, according to calculations of the same author, 
were held abroad. The holdings of British investors in this kind of 
security amounted to about 133,500,000 rubles; the French holdings, 
according to the report of the general commission for the protection 
of French interests in Russia, amounted to 653,200,000 rubles; the 
Belgian holdings, according to the Belgian Reparations Commission, 
were about 38,600,000 rubles. 

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